2018 (5) TMI 1509 - AT - Central Excise

Cash Refund - whether the appellant are entitled to cash refund of ₹ 4,00,000/-, which was allowed by the adjudicating authority in the form of CENVAT Credit? - Held that - Larger Bench of this Tribunal in the case of Steel Strips vs CCE, Ludhiana 2011 (5) TMI 111 - CESTAT, NEW DELHI , submits that CENVAT Credit in cash cannot be allowed except the circumstances laid down under the CENVAT Credit Rules, 2004 - cash refund cannot be allowed - appeal dismissed - decided against appellant.

Summary

Issues involved:
1. Entitlement to cash refund of CENVAT Credit of ?4,00,000.

Analysis:
The appeal was filed against an order passed by the Commissioner of Central Excise (Appeals) Surat regarding the entitlement to a cash refund of ?4,00,000, which was initially allowed as CENVAT Credit. The appellant claimed a refund of ?15,00,000, out of which ?11,00,000 was paid in cash and ?4,00,000 was debited from their RG-23 Part-II account during an investigation. The appellant argued that since their factory was no longer operational, the CENVAT Credit should be sanctioned in cash. The appellant referred to a judgment by the Tribunal in a similar case to support their claim. On the other hand, the Revenue argued that cash refund of CENVAT Credit is not permissible except under specific circumstances as per the CENVAT Credit Rules, 2004. The Revenue cited a judgment by the Larger Bench of the Tribunal to support their position, stating that the Tribunal's decision in a previous case was not a binding precedent.

The Tribunal found merit in the Revenue's argument, citing the Larger Bench's observation that refund of unutilized credit is only permissible in the case of export of goods and not for other reasons. The Tribunal referred to the codified procedure for adjustment of duty liability against the Modvat Account, emphasizing that refund without an express provision is difficult to entertain except in cases of export. The Tribunal highlighted that absence of an express grant for refund implies a bar for refund, and when the right to refund does not accrue under the law, claiming it is inconceivable. Based on this reasoning and following previous precedents, the Tribunal upheld the impugned order, dismissing the appeal. The decision was dictated and pronounced in the open court.